CAMPAIGNS: US investors take stock of Russians - Financial PR

Client: Mobile TeleSystems



PR Team: Gavin Anderson & Company



Campaign: Launch of Mobile TeleSystems on the New York Stock

Exchange



Timescale: May-July 2000



Budget: Around pounds 180,000



Mobile TeleSystems has been Russia's leading mobile operator since

1995.



The company was ready to be listed on the New York Stock Exchange (NYSE)

in 1998, but this was postponed after the economic crisis in August that

year.



MTS's initial public offering (IPO), which occurred last May/June, was

the first by a Russian company since the crisis.



The IPO became viewed as symbolic of renewed investor interest in

Russia.



It was said that future foreign investment into Russia would be affected

by the success of the offering.



The London-based offices of Deutsche Bank and ING Barings carried out

the flotation; the PR campaign was also run from the UK by Gavin

Anderson.



Objectives



To demonstrate to international institutional investors the potential of

MTS and the general recovery of the Russian capital market. To work

within the strict rulings of the Security and Exchange Commission (SEC),

the US governing body of listings on the NYSE, making sure that neither

the company nor the global co-ordinators broke any regulations, which

would jeopardise the listing.



Strategy and Plan



The SEC scrutinised the MTS flotation because it was the first IPO out

of Russia since the collapse of the Russian market. Gavin Anderson had

to pay close attention to every detail of the dealings.



Russian-born Gavin Anderson associate director Marina Boughton led the

campaign to communicate MTS's economic indicators and growth potential

to the international investment community in order to maximise the

demand and the issue price.



Under SEC regulations, companies looking to float in the US are

restricted in what they can say to the US media so that they do not hype

up the offer.



Boughton had to ensure that both MTS management and global co-ordinators

conformed to all SEC rulings when dealing with the press and did not

initiate any direct contact with the US media. This could have resulted

in the IPO being postponed or even cancelled by the SEC.



At the same time, Gavin Anderson had to generate media coverage for the

offer, targeting investors based in Europe and elsewhere.



In the run-up to the IPO, Gavin Anderson helped MTS directors develop

their key messages to the media and trained them to deal with the

Western press, including the best way to explain the advantages of

communicating with the media. Gavin Anderson also helped MTS understand

the implications of listing.



The Russian press and international media were informed about the IPO at

a press conference in Moscow on 9 June; 70 journalists were present.

Briefs were sent to agencies such as Reuters and Associated Press.



Gavin Anderson drip-fed the press with regular updates on the IPO and

continued to stress MTS's strong financial and operational indicators.By

reporting the latter, Gavin Anderson was able to demonstrate that MTS

was a strong investment case and a must for any investor looking for

higher exposure to the recovering Russian equity market.



Measurement and Evaluation



The Financial Times followed the whole process, as did the Wall Street

Journal, which also ran a feature entitled 'Mobile TeleSystems start IPO

roadshow; New York listing a test for Russian shares'.



On 30 June, MTS was successfully listed on the NYSE. All main news

agencies and financial publications, including the FT, WSJ, New York

Times, Public Network Europe and International Financial Review reported

the event. All the coverage was positive.



Results



MTS was listed on the NYSE on 30 June with an issue price of dollars

21.50 per ADR (American Depository Receipt). The offer was

six-and-a-half times oversubscribed and the price peaked at more than

pounds 17 on the first day. MTS is currently trading at around pounds

20.



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